Hard to settle in a housing slump

by Kristy Symonds

May 12, 2008

PERTH’S flat-lining housing market is seeing settlement agents slash staff.

ABS figures released last week show Perth had the slowest home price growth of any Australian capital city in the year to March 2008. Perth prices rose just 0.6 per cent, while Brisbane and Adelaide prices leapt by more than 20 per cent.

Nancy Hulbert, of Maddington based Residential Settlements, says her company managed only 65 settlements last month, with 90 settlements needed to break-even.

With wages higher than income, she has been forced to consider laying off a member of her 11-person team.

Mrs Hulbert said she was worried about the cut-throat behaviour in her industry, as settlement agents cut their charges below cost to compete for the dwindling number of clients. She said stamp duty reductions announced in the recent WA Budget would elongate the slump, with homebuyers holding off until the cuts kick in on July 1.

Jennifer Dickson, owner of Freeway Settlements in Warwick, says the cut will cause both real estate and settlement agents struggle.

“The current situation has a huge financial affect,” she said. “Directors of companies such as myself are forced to cut their own wages in an effort to keep staff.

“We have to watch every penny we spend.”

Mrs Dickson’s small company was forced to make one staff member redundant last week, leaving her with just four staff.

Shane Jacobs, of Shane Jacob Settlements, who is also an office bearer with the Australian Institute of Conveyancers, says there’s a nervous vibe surrounding the settlement industry.

“The industry has softened to the point where we must be very conscious of finance,” he said.  “Staff are scared.

“They have mortgages to worry about too.”